Trump is sabotaging his own economic agenda

It’s growing increasingly likely that by the end of 2017, President Donald Trump won’t have a single legislative accomplishment to crow about.

Trump stormed Washington with a long list of do-items, but the key elements of his plan to make America great again were economic—stimulative tax cuts, new infrastructure spending, better trade deals, deregulation, and healthcare reform that would get a handle on soaring costs.

Trump has gotten the ball rolling on most of those issues, but he has also sabotaged his own progress through numerous self-inflicted controversies that are sapping his political leverage just four months into his presidency. His recent decision to fire FBI Director James Comey could be the biggest roadblock yet erected on the pathway to his own agenda. “An awful lot of Republicans are going to abandon Trump,” analyst Greg Valliere of Horizon Investments recently told Yahoo Finance. “He’s a liability for their own political careers.”

Trump is unwittingly demonstrating how a US president loses “political capital,” at a point in his presidency when many of his predecessors were still enjoying an electoral honeymoon. Democrats are united in opposition to Trump, and emboldened by his political missteps. As Republicans drift away from him, Trump will lose the ability to wrangle the incremental support he’s bound to need on close, contentious votes. And every Republican vote is likely to matter, given the GOP’s slim, two-seat majority in the Senate and the divisive nature of many Trump proposals.

Why start with healthcare?

Trump, for some reason, insisted on leading with his most controversial proposal—repealing Obamacare—perhaps because he felt winning on such a hot-button issue would generate powerful momentum. The catch is, he hasn’t won, and may never win on repealing Obamacare. The House barely passed a repeal bill in early May, on its second try, but that bill seems to have no chance of passing in the Senate, which is getting started on its own bill. Congress will be wrestling with the issue all year long—and only when that passes, Trump and other GOP leaders say, will it move onto tax cuts.

Financial markets care more about tax cuts than any other parts of Trump’s agenda, and the 12% surge in stock values since Trump won last November is based largely on the expectation of lower corporate tax rates and larger corporate profits. But tax cuts, which once seemed possible in 2017, now seem likely to drift onto the 2018 calendar. And if Congress can’t pass something by mid-year 2018, it may shelve tax cuts completely, since by then it will be the middle of the Congressional midterm campaigns, a notoriously hard time to pass any serious legislation.

Trump’s Commerce Secretary, Wilbur Ross, has been complaining about the Senate slow-rolling Trump’s efforts to revamp the North American Free Trade Agreement. Ross has a point—but Trump himself is arguably the cause of the slowdown. Republican Sen. John McCain of Arizona is the unseen hand behind the NAFTA slowdown, motivated partly by Trump’s tirades against Mexico, which borders McCain’s home state. Were Trump less bombastic—or more popular—mavericks like McCain would have less standing to block his policies. That’s how political capital works.

Trump could have begun his presidency by pursuing easier deals and making friends instead of waging war. “Why he didn’t go for infrastructure first, that was the low-hanging fruit,” Valliere said. “It’s a mystery.” Democrats generally favor more infrastructure spending, and Trump could have started off with a bipartisan win. Instead, his push to repeal Obamacare guaranteed a divisive political fight he could very well lose.

The Comey firing might blow over, but it might become a chronic, low-boil crisis, as doubts continue to swirl about Trump’s ties to Russia and pressure mounts on the Justice Department to appoint a special prosecutor to investigate. A special prosecutor, free of any political oversight from the White House or Congress, could be a nightmare for Trump and an ongoing distraction for legislators trying to craft bills able to pass.

It’s wise not to underestimate Trump, who upended the entire political establishment on his way to the White House. But at some point his record will become more important than his rhetoric, and he will need something to show for all the china he has broken. If he keeps stepping on his own agenda, victory will slide further and further into the future.